Bridge Loans
This kind of loan helps people who are working to sell one property while they also purchase another. When there is a gap in time, meaning the first property has not sold yet but the other one needs to be purchased immediately, then a bridge loan can help cover the cost of down payment and other immediate needs and it is usually paid in full when the first property is sold. This is not without risk because there is no guarantee that the first property will sell in time. However, this kind of loan does make it possible to purchase the second property without having to build in a "contingency clause" meaning that second purchase is not going to have to wait until the first property has sold. It is important to note that not everyone can qualify for a bridge loan because it does require that the buyer be approved for owning two homes at one time, even if for just a short period of time. It is sometimes possible to put one set of payments on hold if there is a sale pending or resolution is recognized to be coming soon. When people are relocating or have to move quickly, bridge loans can be a big help.